How the link between credit and economic growth has broken: Joseph Mason column

After the financial crisis of 2008–9, authorities needed to 'rehabilitate' corporate debtors to improve their creditworthiness. Why have they failed?

Joseph Mason: fiscal drag dangers

As I write this, Standard & Poor's has downgraded the US's debt rating and other countries' ratings may follow. Markets are facing meltdown. We may all know that the events are related to what the world has been through since 2007, but few understand the linkages involved.

In 2008–09, already over-extended sovereigns bailed out their banking sectors to avoid losses. The reasons are simple: banks are thought to intermediate high-asymmetric information assets – particularly small business loans –

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Credit risk & modelling – Special report 2021

This Risk special report provides an insight on the challenges facing banks in measuring and mitigating credit risk in the current environment, and the strategies they are deploying to adapt to a more stringent regulatory approach.

The wild world of credit models

The Covid-19 pandemic has induced a kind of schizophrenia in loan-loss models. When the pandemic hit, banks overprovisioned for credit losses on the assumption that the economy would head south. But when government stimulus packages put wads of cash in…

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